This is a revision of an R21 proposal to develop a multi-component cognitive behavioral treatment (CBT) program for posttraumatic stress disorder (PTSD) among public sector consumers with PTSD and severe mental illness (SMI). Data show that trauma victimization (up to 98%) and PTSD (up to 43%) are highly prevalent among persons with SMI (e g, schizophrenia) who are treated within the public sector. Among the general population PTSD is associated with nearly the highest rate of medical and other service use, and therefore may be one of the costliest mental disorders. Evidence also shows that individuals with PTSD tend to receive inadequate mental health services. Thus, it is clear that trauma has a prominent impact on the public health. Despite a growing awareness of the significant impact of traumatic experiences on persons treated within state-funded mental health systems, there is a striking lack of empirical data regarding effective interventions for these consumers with PTSD and SMI. In fact, although effective psychosocial treatments have been developed for other traumatized groups (e.g., male combat veterans, female rape victims), little effort has been made to adapt these treatments for persons who are treated within large state-funded mental health systems. Thus, there is a pressing need for the development and evaluation of appropriate treatments designed specifically for use with this population in this of practice setting. The specific aims of this proposal are to (1) develop a comprehensive treatment program and treatment manual for PTSD among public sector consumers with PTSD and SMI, adapting existing components of CBT interventions (education, exposure therapy, social skills training) for PTSD, (2) train public sector therapists in the use of this treatment manual and evaluate therapist competence and adherence to following the manual, and (3) conduct a pilot study with public sector consumers with PTSD and SM! in order to evaluate outcome variables that fall into four domains-- PTSD symptoms, social functioning, symptoms of other psychiatric conditions (e g, psychosis), and treatment credibility and satisfaction. This proposal is responsive to the NIMH objectives described in Healthy People 2010 (Objectives 18 9 and 18 10) and the Bridging Science and Service report recommendation regarding the need for research that characterizes promising interventions and service settings (recommendation #10).